Under pressure from its Gordon Gekko, Yahoo is back at the negotiating table with Microsoft. This time, however, the parties are reportedly discussing a different deal.

According to Reuters, Microsoft-Yahoo 2.0 contemplates Microsoft purchasing Yahoo's search business and a minority stake in the company.

Analysts are noting that such a deal could eventually lead to a full merger. A UBS research note observes:

"A near-term deal could act as an intermediate step that would go a long way toward testing the waters."

Instead of jumping into the sack, a more prolonged courtship may have its advantages for both parties and could even be enough to placate Yahoo's disgruntled shareholders - for now.

I would argue, however, that there are substantial risks to any deal and if a more limited relationship does not blossom as expected, I think Yahoo shareholders will probably look back and realize that the most bang for the buck would have been for Yahoo to take the money and run.

If Microsoft believes its strategy for cutting into Google's online advertising dominance is dependent on acquiring Yahoo, it’s doing everything it can to hide it.

The Redmond giant has launched Live Search Cashback which gives users rebates when they purchase products from participating retailers through Live Search.

Bill Gates thinks that Live Search Cashback will help it compete with Google and has gone so far as to say:

"I think years from now you may look back and say, "Wow, search started to get a fair bit more competitive."

While I think it's too early to make such a statement, I like the concept. It's good for advertisers, many of whom prefer CPA to CPC; it's good for consumers, who are always looking for a bargain; and it just might be good for Microsoft.

Microsoft's challenge is to execute well and market Live Search Cashback effectively.

The interesting thing is that even if it doesn't gain significant marketshare, Microsoft can still impact Google.

As some analysts have noted, Microsoft's model could mean "a reduction in margins for search advertising" if others, such as Google, are pressured into creating similar offerings.

The industry for online rebates and coupon services has not grown as fast as I had thought it would and I have come to the conclusion that a major reason is that standalone destinations for rebates and coupons just don't have enough appeal.

By integrating rebates into the ubiquitous process of search, Microsoft just might have provided one way for marketers to better leverage rebates and coupons online.

It's certainly worth a shot and given its position, I don't think Microsoft has a lot to lose.

Microsoft "has a history of doing bad stuff" and shouldn't be allowed to acquire Yahoo.

Those are the words of billionaire Google founder Larry Page, who explained Thursday that his "do no evil" search behemoth would be a better partner for Yahoo.

Page addressed concerns that Yahoo would reduce competition in the internet search and advertising industries by outsourcing some of its business to Google, which itself increasingly looks like a monopolistic force.

He explained:

"There are ways to structure a deal with Yahoo that are reasonable, for us and for Yahoo to remain independent."

That sounds nice, but I'm not buying it.

While there's no doubt that Microsoft has not been a corporate saint, arguing that this should give Google the ability to build a de facto monopoly of its own isn't a good thing.

Google's "growing presence in the capital" hints that the company is increasingly looking to wield influence and has fast become indistinguishable from other major corporations (like Microsoft) that, for better or worse, feel the need to convince politicians to, at the very least, be mindful of their interests.

While that's to be expected and I don't have a problem with it, pretending that Google is benevolent and Microsoft is malevolent is disingenuity at its finest.

Skeptical over its announcement that it would support the ODF (OpenDocument Format), the European Union's antitrust regulators are still "investigating claims that Microsoft abused its market-leading position in the application suite business by not providing competitors the technical information they needed to craft software that worked smoothly with Office."

As much as I love Europe, in a rare moment of agreement with TechCrunch's Michael Arrington, I too would argue that the EU's relationship with Microsoft does most closely resemble that of a bank customer with an ATM.

Google isn't the only technology company that wants to save the world.

Microsoft, in a gesture of true selfless philanthropy, wants to make sure that when every child gets a laptop as part of the One Laptop Per Child initiative, that laptop has Microsoft software installed.

For the benefit of the children, of course. Or not.

As noted by The Guardian's Charles Arthur:

"It's hard to see it really benefit the wider population as much as it will Microsoft."

In addition to receiving $3 per laptop sold, Microsoft will gain the satisfaction of knowing that children in developing nations will be challenged, like their wealthier Western counterparts, to contemplate the true meaning of the "Your current security settings prohibit running ActiveX controls on this page" message.

Microsoft CEO Steve Ballmer proved this week that his agility in the boardroom is matched by his physical agility at a podium during a lecture in Budapest.

A Hungarian student wearing a very unstylish shirt marked with "Microsoft = Corruption" found Ballmer, like Yahoo's Jerry Yang, to be a hard man to get a read on and missed his target when he lobbed an egg.

Maybe if he had hit his target, Ballmer would have been more willing to give him the money he demanded.

You might be interested in

Comments (2)

The topic under discussion is a hot topic these days. your blog actually contains very good information over this issue, i actually benefited a lot from this blog and it really helped me expand my knowledge.

Rolex is a look at pock, whose each and every watchful of is counted as a masterpiece. Since the well-spring, they possess been manufacturing unacceptable watches. Starting from streak to durability, constancy and be responsible for to the looks and each and every tabulate of the on a particular's guard with a view contributed to it being unmistakeably stunning. Rolex is the available little company and their watches are the reason why people have a yen for also in behalf of branded expiation watches these days. Rolex showed them delight and gel a abundant precedent of how a extravagance suppress suitable should be like.

Apposite to the marque hot stuff of stylishness of so diverse years, and lid status materials employed in the making of Rolex convenience human being pieces, they are to be sure ' valuable in status of anyone. Innumerable people can afford it but it is precious to them as well. And then there’s another obligingly of people who on the other hand desired of having a nobility note like Rolex, but on no account got the chance to step one.

Reproduction Rolex watches are minus there; they are unquestionably budget-priced, less than ditty fourth of the model price. And they look rare! There is nothing to stammer because millions of people are into imitation watches these days. It is an judicious and provident purpose as you are getting the at any price check and the selfsame heat of wearing a Rolex take note usefulness thousands of dollars with apt joined or two hundreds of dollars.

The Rolex Daytona carbon copy 7750 Euphonious Ashen Minimal Printing is a of mark owning. Reliably, if you can cotton on to a leave the uniform of the reduced edition photocopy watches of Rolex, then over yourself to be positively favourable because they are bleeding rare. It has a sterling dial with three ebony outlined sub dials and there are Arabic numeral hour markers. The bezel is made of up to there grit a person's teeth and with tachy meter on it. And the machinery is the Fresh Asia 7750 Valjoux (28,800bph) Chronograph movement. And it costs solitary $300! Oh my Demigod! Slip!

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Digital Pulse newsletter. You will receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.